What are corporate relationships?
Corporate relations are the relations that arise between a business entity and its shareholder and/or between its shareholders regarding the acquisition, exercise and termination of corporate rights and obligations.
How are corporate relations regulated?
The basic framework is defined by the Ukrainian legislation. Given that this area is largely a sphere of private relations, it is not regulated in detail by law, in particular with regard to the rights and obligations of holders of corporate rights, as well as certain aspects of the relationship between such holders.
For this reason, the law often provides the parties to corporate relations with the opportunity to resolve certain issues that arise or may arise between them independently, at their own discretion.
The main document in which the parties to corporate relations have the opportunity to regulate their relations in detail is the charter, which is one of the constituent documents and therefore its availability is mandatory.
The charter is practically a public document. It is submitted to the state registrar, scanned into the unified state register system, submitted to banks when opening accounts and going through the banking procedure for updating information about the company, provided to counterparties upon request.
In this regard, not all aspects of the relationship between the participants can be regulated in the charter, which is why corporate agreements are concluded for such cases, which are usually confidential in nature, but can legally record things that the parties wish to keep secret.
Are the requirements for the charter defined by law?
The legislation does set certain requirements for the content of the charter, but in our opinion, they are too superficial and should only be taken into account when drafting the charter.
That is why, in order to avoid problems in the future, we strongly recommend that you take a responsible approach to drafting the charter and be guided by the principle that it is better to agree on all the terms and conditions in advance.
A well-drafted charter will help prevent corporate disputes in the future.
Why do disputes arise between parties to corporate relations?
The answer is obvious -- the existence of objective pathogens (circumstances) and insufficient regulation of corporate relations. After all, if the participants in the process rely on the rules of law, then in case of misunderstandings, they will be in for an unpleasant surprise in the form of legislative gaps.
It is worth noting that the current legislation does not provide answers to pressing questions in the field of corporate relations.
What determines the emergence of a dispute between parties to corporate relations?
When participating in corporate legal relations, their carriers often have misconceptions about their rights and obligations. In most cases, this is the cause of misunderstandings between the parties to corporate legal relations, which, if one of the parties is unwilling to compromise, can turn into a corporate dispute.
The emergence of corporate disputes depends on many factors, but the most popular among them are the following:
- - the existence of circumstances under which one of the parties to the legal relationship will not agree with the decisions, actions or inaction of the other parties.
- - Completeness of regulation of relations between the parties (by law, constituent documents, corporate agreements, etc.).
- - awareness and understanding by each party of its rights and obligations in corporate relations.
- - the temperament of the participants in corporate legal relations, as this determines the duration of the conflict.
The existence of circumstances under which one of the parties to the legal relationship will not agree with the decisions, actions or inaction of the other parties
Awareness and understanding by each party of its rights and obligations in corporate relations
Completeness of regulation of relations between the parties (legislation, constituent documents, corporate agreements, etc.)
Temperament of the parties to corporate legal relations, as this is what determines the duration of the conflict.
Obviously, this list is not exhaustive. However, it does demonstrate that each corporate dispute is unique and depends on a number of objective and subjective factors. Therefore, the approach to its solution must be extraordinary.
How to prevent a corporate dispute from arising?
We can rarely influence the objective factors that trigger corporate disputes, so we need to influence the subjective factors.
It is the regulation of the rights and obligations of participants in corporate legal relations that can minimise the risk of corporate disputes.
What is the value of working with us?
We have many years of experience in corporate relations.
We understand the causes of corporate disputes and know how to prevent them.
Obviously, a corporate dispute has a negative impact on all participants and the company itself.
That is why we help the participants to reach an agreement in advance, and to put the agreements reached into the basis of legal documents that are signed by the parties and help minimise the risk of a corporate dispute.
If we are approached by the parties to a corporate dispute, we offer legal options for resolving the dispute after analysing the circumstances of the case.
Our knowledge and experience allow us to prevent corporate disputes and find a way out of any situation.
